Investors have several reasons to be optimistic toward bitcoin even as it enters one of the sleepiest trading months of the year. The flagship cryptocurrency ended July — usually a strong month — up 5% at $65,596.41, according to Coin Metrics. In June, bitcoin fell 8%. It has finished seven of the past 11 Augusts in the red, generating an average 2.69% return for the month, according to CoinGlass, largely due to a more than 65% gain in August 2017. “We predicted that the elections would be a major theme and driving factor in the second half of the year and that just came a lot sooner than we expected,” said David Duong, head of institutional research at Coinbase. “It’s very likely that’s going to continue playing a part here” in the month ahead, Duong said. BTC.CM= 1M mountain Bitcoin (BTC) over the past month A potential Trump/Vance administration favoring a weaker dollar, as well as Trump’s promised support of bitcoin ownership and development in the U.S., could sway prices, according to Zach Pandl, Grayscale Investments’ head of research. “July was a momentous month for crypto with the launch of U.S. spot Ethereum ETFs and support for bitcoin from the Republican party — generating a broader public discourse about U.S. crypto policy opportunities,” Pandl said. “The question for August will be whether improving industry fundamentals translate into higher valuations.” The bitcoin community was stirred by former President Donald Trump’s pro-crypto promises made to enthusiasts at the Bitcoin 2024 conference in Nashville last week, and a proposal from Sen. Cynthia Lummis, R-Wyo., to create a U.S. bitcoin reserve. Alex Miller, CEO of Hiro, a startup that makes tools for developers to build apps on the Stacks blockchain, expects more tepid price action in August. Macroeconomic factors, including “disruption in the tech stock space,” could make trading choppy for the rest of the third quarter ending Sept. 30, Duong at Coinbase said. Additionally, there is still a supply overhang coming from Mt. Gox distributions and “locked up” altcoins. “Bitcoin is going to trade inside of a range, but the floor is much higher now than it used to be” due to demand from exchange-traded funds, he said. “Both the floor and ceiling are capped for bitcoin right now. It’s hard to say how strong those moves are going to be over the course of the month, but I do know that I don’t expect to see a break above all-time highs for bitcoin in the next two months.” Bitcoin has traded in a range between $55,000 and $70,000 since March, when it notched an all-time high above $73,000. It has struggled to hold above that ceiling since. Pandl at Grayscale is upbeat on the prospect of bitcoin reaching another all-time high sometime this year, and ether retesting $4,000. “Equity markets have wobbled but, so far, bitcoin has performed well, trading more like a hedge against dollar weakness,” Pandl said. “Whether [it] can remain resilient against a bigger equity drawdown will be an important question as we head into August 2024.”
